Chapter 12 Powerpoint Presentation

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<ul><li> 1. Chapter 12 Learning Objectives <ul><li>After studying this chapter, you should be able to: </li></ul></li></ul> <ul><li>articulate how institutions and resources affect alliances and acquisitions </li></ul> <ul><li>gain insights into the formation, evolution, and performance of alliances </li></ul> <ul><li>understand the motives and performance of acquisitions </li></ul> <ul><li>participate in two leading debates on alliances and acquisitions </li></ul> <ul><li>draw implications for action </li></ul> <p> 2. 3. Institutions, Alliances, and Acquisitions </p> <ul><li>formal institutions set of formal legal and regulatory frameworks impacting: </li></ul> <ul><li>(1) antitrust concerns </li></ul> <ul><li>(2) entry mode requirements </li></ul> <ul><li>informal institutions -imitation drives many alliance/acquisition decisions yet some firms rush into alliances and acquisitions without adequate due diligence and then get burned </li></ul> <p> 4. 5. RESOURCES AND ALLIANCES VRIO Framework </p> <ul><li>Valuealliances-must create value by reducingcosts, risks, and uncertainties </li></ul> <ul><li>real option -investment in real operations asopposed to financial capital </li></ul> <ul><li>learning race -competitive situation in whichpartners aim to outrun each otherby learning the tricks from theother side as fast as possible </li></ul> <ul><li>acquisition premium-difference between theacquisition price and the market value of targetfirms </li></ul> <p> 6. RESOURCES AND ALLIANCES VRIO Framework </p> <ul><li>Rarity -ability to successfully manageinterfirm relationshipsoften calledrelational (or collaborative) capabilities may be rare </li></ul> <ul><li>relational(orcollaborative )capabilities </li></ul> <ul><li>relationships that occur within anorganization firms must have unique skillsto execute strategy </li></ul> <p> 7. RESOURCES AND ALLIANCES VRIO framework </p> <ul><li>Imitability - one firms resources and capabilities maybe imitated by partners </li></ul> <ul><li>-trust and understanding -firms withoutgood chemistry may have a hard timeimitating such activities </li></ul> <ul><li>-firms that excel in integration possesshard-to-imitatecapabilities </li></ul> <p> 8. RESOURCES AND ALLIANCES VRIO framework </p> <ul><li>Organization - alliance relationships are organized in a way that makes it difficult for others to replicate </li></ul> <ul><li>- whether acquisitions add value boils down to how merged firms are organized to take advantage of the benefits while minimizing costs </li></ul> <p> 9. 10. 11. PERFORMANCE OF ALLIANCES </p> <ul><li>Factors that may influence alliance performance:</li></ul> <ul><li>(1) equity </li></ul> <ul><li>(2) learning and experience </li></ul> <ul><li>(3) nationality </li></ul> <ul><li>(4) relational capabilities </li></ul> <ul><li>None of these is able to assert an unambiguous, direct impact on performance </li></ul> <p> 12. 13. 14. </p>